Apparent Manufacturer Theory of Liability Upheld for Subsidiary Insulation Cement Manufacturer Washington Supreme Court, November 1, 2018

WASHINGTON – In a case of first impression, the Washington Supreme Court adopted Section 400 of the Restatement (Second) Torts, recognizing a manufacturer’s liability for claims arising prior to the 1981 Product Liability and Tort Reform Act, and assessing such liability by applying the objective reliance test, which requires viewing all of a defendant’s relevant representations from the perspective of the ordinary, reasonable consumer, finding that a Court of Appeals Panel had erred in holding that objective reliance be judged only from the perspective of a sophisticated industrial purchaser of asbestos products. Finding that the plaintiff presented sufficient evidence demonstrating an issue of material fact as to whether reasonable consumers could conclude that Pfizer was an “apparent manufacturer” of an asbestos product that allegedly caused Vernon Rublee’s (Mr. Rublee) illness and death, the Supreme Court reversed the Court of Appeals and remanded for further proceedings.

The plaintiff Margaret Rublee (Plaintiff) and Mr. Rublee filed a personal injury action against multiple defendants, including Pfizer, for damages relating to asbestos exposure throughout Mr. Rublee’s employment at the Puget Sound Naval Shipyard (PSNS). Pfizer was named as a defendant pursuant to the “apparent manufacturer” theory found in Section 400 of the Restatement (Second), upon the claim that liability could be imposed upon Pfizer since it represented itself as a manufacturer of the asbestos-containing products that allegedly caused Mr. Rublee’s mesothelioma. Specifically, Quigley, which manufactured insulation cement, was a subsidiary of Pfizer during the relevant time period, a fact noticeably discerned not only from promotional materials, stationery, invoices, and data sheets, all of which contained both company logos and names, but also from the bag of insulation cement itself, which identified Quigley as the manufacturer and Pfizer as the parent company. Pfizer moved for summary judgment after on the ground that the plaintiff could not establish apparent manufacturer liability.

Although Quigley had previously filed for bankruptcy, which barred the plaintiffs from asserting asbestos-related claims against Pfizer on successor liability grounds, the trial court found that Quigley’s applicable bankruptcy trust injunction does not bar suits based on the “apparent manufacturer” theory found in the Restatement. The trial court, however, went on to grant Pfizer’s motion, concluding that “a reasonable purchaser would not have been induced to believe that Pfizer was such apparent manufacturer of the injurious products within the meaning of [Section 400 of the Restatement (Second)].” Since the scope and interpretation of Section 400 presented questions of first impression in Washington State, the trial court certified the case for discretionary review.

A Court of Appeals Panel affirmed the trial court, holding that there was no issue of material fact as to Pfizer’s status as an apparent manufacturer. The Panel held that the plaintiff failed to establish an issue of material fact under any of three tests courts apply when determining apparent manufacturer liability: objective reliance, actual reliance, or enterprise liability, and therefore declined to decide which of the three tests the Washington Supreme Court would adopt thereon in. With particular regard to objective reliance, however, the Panel held that apparent manufacturer liability should be viewed from the perspective of a sophisticated user or commercial purchaser of asbestos products rather than the viewpoint of an ordinary consumer or end-user such as Mr. Rublee. After another Pfizer win, the plaintiff petitioned the Washington Court of Appeals, arguing that the Court of Appeals Panel erred in holding that objective reliance be judged only from the perspective of a sophisticated industrial purchaser of asbestos products.
The Washington Court of Appeals confirmed that Washington State should accept and adopt apparent manufacturer liability for claims arising prior to the 1981 Product Liability and Tort Reform Act.  The Court further went on to agree with the plaintiff and hold that Courts should apply the objective reliance test when determining apparent manufacturer liability, and consider all of the defendant’s relevant representations from the perspective of an “ordinary, reasonable consumer.”  The Court reasoned that this is consistent with the Court’s general approach in products lability cases of looking at the “reasonable expectations of ordinary users and consumers, not the particular plaintiff.” Moreover, the Court of Appeals found that the “sophisticated purchaser” viewpoint is inconsistent with Washington law since courts have long recognized that consumer protection is the touchstone of Washington’s products liability law.

Concluding that Pfizer’s reliance on the “sophisticated purchaser or informed user” approach to apparent manufacturer liability was inconsistent with its findings, and finding compelling the conjunction of Quigley and Pfizer’s names on promotional materials, stationery, invoices, data sheets, and the insulating cement at issue used by Mr. Rublee, the Court of Appeals held that there was a material issue of fact as to whether Pfizer could be held liable under the apparent manufacturer doctrine.

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